Making high quality circles (especially small ones) is difficult with a compass. A circle template allows circles to be constructed with lead holders and mechanical pencils. A circle template is a plastic tool that has been perforated with round holes of various diameters. The holes are oversize by a small amount to accommodate the pencil width. Even large circles are better drawing with circle template if the correct hole diameter is available.
It’s worth mentioning that a wide variety of other templates used to be use to streamline the drawing of repetitive such as nuts, bolts, and architectural elements. Ellipses were also commonly constructed with templates.